Keurig Green Mountain
Christian Derderian
Nick Fazzolari
Miguel Jimenez
Anastasia Zavgorodni
Table of Contents
I. Introduction
II. Industry Economic and Value Chain Analysis
A. Company Competitors
B. Value Chain Analysis
C. Firm’s Market Share
D. Industry-wide Technological Developments
E. Economic Analysis
F. Firm’s Business Strategy
III. Financial Analysis of the Firm
A. Assess Short-term Liquidity
B. Critique of Capital Structure and Long-term Solvency Issues
C. Firm’s Asset Utilization
D. Firm’s Operating Performance
E. Meaningful Ratios
IV. Executive Summary
A. Summary Interpretation
B. Z-Score
C. Conclusion
V. Appendix
A. Financial Statements
B. Common Size Statements
I.
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Although the company is known for their coffee, they also drive a great portion of their revenue from baked good sales, which differs greatly from the Keurig Green Mountain strategy. Dunkin does compete against Dunkin intensely in the New England market, as both companies were founded and based in the area.
B. Value Chain Analysis The Keurig Green Mountain Inc. value chain has seven main steps.
Step 1. Cultivation
Farm management techniques can affect coffee cultivation. Water irrigation isn’t used often in the coffee cultivation because much of the water needed for coffee growing comes from rainfall. Step 2. Packaging & Shipping After coffee is harvested, it must be dried, packaged in sacks, and transported. During this stage, energy is sued for drying, storing, and mechanically hulling the coffee beans. This stage of the value chain also includes transportation of green coffee beans to facilities. Step 3. Processing Once green coffee beans arrive at facilities, they are roasted and grinded for packaging. There is an established infrastructure to track the energy use of the roasting operations in a new way, providing data that is more useful for managing energy efficiency. Step 4. Packaging After the coffee is roasted it is packaged. This stage of the value chain includes the physical packaging of the roasted coffee as well as the upstream material requirements for the packaging itself. Step 5. Distribution After packaging, coffee is
Coffee is then sent to roasting facilities where it is blended. By “manipulating the composition of the blend, roasters
There are a number of significant competitive barriers within the coffee bean and coffee grind industry. While virtually any firm can purchase the raw materials or even the finished product in the form of ground coffee, the packaging and distribution of the product is a much more sophisticated endeavor. The most significant
In looking at the history of coffee through the book Uncommon Grounds, we have seen coffee move throughout the world. Coffee originated in Ethiopia and grown wildly that was discovered by a goat name Kaldi. It was first eaten as a berry, then boiled, then roasted and finally, grinded to what we now know drink today and have created new ways to drink it as well. Coffee is the second most traded commodity and is grown in the Southern Hemisphere and consumed in the Northern Hemisphere. Here in the United States, it is evident that Americans love their coffee and drink it many times throughout the day. It can be argued that the “world coffee supply would continue to grow, stimulated in large part by the seemingly bottomless American coffee cup.”
There are four types of coffee in Togo such as, forest coffee, garden coffee, semi forest coffee and plantation coffee. They are all different in their unique ways.First the coffee is handpicked and fertilized with organic wastes.The coffee farmer then transports his coffee to the second process by hoof or by foot.The red coffee bean cherries are placed into a large, cement hopper.Workers pick out any leaves, sticks and debris.Special equipment is used to rub the layer of cherry off of the coffee bean. Then the beans are processed through a machine that separates the light colored beans and the denser beans, the beans are then sorted and set into separate bags and the light beans are sold to locals. After a good wash the beans are laid out on flat screens to drip dry. the beans are then put into large bags and left for several weeks to thaw and ripen, they are then graded according to its weight and the best quality goes on to the international market. These beans are transported internationaly through large boats and kept under a persise tempeture and is taken care of extreamly.One of the positive things about Togo coffee is that all of it is organically produced. In Dilla and Kafa Sheka state for example,
Green Mountain Coffee Roasters (GMCR) started as a small café in Waitsfield, Vermont in the year of 1981. It was in 1993 that the company went public and acquired the early phase of Keurig Incorporated Inc, and then completed the acquisition in 2006. (Unknown.( 2004). Gmcr.Retrieved from http://www.gmcr.com/about-GMCR.html) Once these two companies combined it made the way we drink beverages different than ever before in both the home and office. According to GMCR’s website “Today, GMCR is recognized as a leader in specialty coffee and coffee makers, and acknowledged for its award-winning coffees, innovative brewing technology, and environmentally and socially responsible business practices.” ((Unknown.( 2004).
Bongo Java Roasting Co., located in Nashville 's historic Five Points area, is quickly becoming a hipster haven. On any given day of the week you can spot musicians and artists hanging out in their natural habitat, sipping lattes and cappuccinos, talking business. The staff is just as creative and stylish as the shop 's patrons, with tattoos, funky haircuts, and infectious personality. At Bongo Java Roasting Co. not only can you enjoy some of the best drip coffee and espresso drinks in town, you can actually watch the roasting process as it is happening. Bongo Java Roasting Co. specializes in 100% organic and 100% fair-trade coffee. This means that they use only the highest quality, hand-picked beans from around the world, but also pay the farmers a respectable, livable wage. Unfortunately, this is not common practice in the coffee industry. This is what makes Bongo Java so unique. The company started seventeen years ago as a small coffee shop with only one location. Since then Bongo Java has become a Nashville staple with three busy locations, as well as a progressive business model in the specialty coffee industry. The a seemingly endless variety of coffee is roasted five days a week. The roasters at Bongo take a hands-on approach to ensuring that their coffee is the best in Nashville. They man a large roaster that cranks out about forty pounds per batch, which is microscopic compared to most corporate coffee roasters. But the expertise of the employees and attention to
Currently, the coffee beans prepared for all locations in North and South America are processed throughout the United States of America. By opening a Roasting Facility in Toronto, ON Canada - the largest city in Canada - will assist in the future growth. By preparing for expansions it will assist in keeping costs low in the future. This occurs by building and purchasing materials and equipment in the present instead of the future when prices rise from inflation, increasing profits, and demands to list a few.
There is an excessive demand and cost for gasoline nowadays, coffee is believed to be the following utmost exchanged product in the global market place succeeding to oil. Coffee is developed way more than fifty nations in a stretch everywhere around the equator and offers an income for more than twenty million growers. Overall, estimation is about one hundred million societies universally that are included in the spreading, releasing, interchanging and selling of the production. During 2001, coffee growers and farms created around fifteen billion pounds of coffee whereas the global market place merely acquired thirteen billion pounds. The overstock in the coffee business is not a typical mechanism and is one of the
14-15 of Types of Coffee). Once a coffee seed has been processed it cannot be used to produce another plant. The work does not end after the growing because it really begins with the processing of the beans.
• Strong bargaining power from a supplier: MTS, being the only supplier for the K-Cup packaging line, has a control over the machine. Having no substitution plan in place, Keurig is forced to follow MTS’s request to fulfill the
For each cup of fresh coffee, coffee beans should be grounded just before brewing. Therefore, for each customer, the coffee is treated as fresh produce. Coffee should not be overexposed to oxygen, light, heat and moisture. In order to save customer from the time of waiting for the clerk to grind their coffee, customers can grind their own coffee beans in the store. Instead of walking in to wait in line, customers can help the process by grinding their own coffee beans before getting in line. The grinder will be pre-set to grind the coffee beans to the perfect texture of fineness.
People love to drink coffee. Coffee shops, independently owned or chains are every corner. Statistics show that people are taking more coffee every day. It is a very profitable business.
Starbucks needs to find another strategy, one that continues to encourage conservation and farmer education, but also a strategy that would affect the industry as a whole. With this in mind Starbucks and CI decided to create coffee sourcing guidelines that would affect the suppliers of coffee. “Under Starbucks new system, introduced as a two year pilot program, suppliers of any size or location could earn up to 100 points for performance in three sustainability categories…if the suppliers me all the criteria, that is ,scored 100 points, it would become a preferred supplier and its coffee would receive priority in Starbucks’
The applications of the system could be prevalent throughout the coffee growing regions of Latin America where there are water resources and small-scale coffee farms. Coffee is 8.1% or $438 Million of Nicaragua’s exports, which makes it the second most exported commodity in the county (Nicaragua, n.d.). The energy force that is driving the harvesting and processing is predominantly manual labor (Raichle et al., 2012).
In the production process, the last stage is the warehousing process. The carton boxes which had filled with water bottle will store at warehouse. The forklift was used to moved the carton